TIDMGFRD
RNS Number : 4523D
Galliford Try Holdings PLC
03 March 2022
3 MARCH 2022
GALLIFORD TRY HOLDINGS PLC
HALF YEAR REPORT FOR THE SIX MONTHSED 31 DECEMBER 2021
Continuing strong financial and operational performance
-- Profit before tax increased to GBP7.1m (H1 2021: GBP4.1m) before exceptional costs(1) .
-- Revenue increased 10% to GBP594m (H1 2021: GBP542m).
-- Divisional operating margin increased to 2.2% (H1 2021: 1.6%)(2) .
-- Strong balance sheet , with average month-end cash for the
period of GBP180m (H1 2021: GBP158m) and PPP asset portfolio of
GBP48m (June 2021: GBP49m).
-- Positive outlook supported by high quality and sector focused
order book of GBP3.4bn (H1 2021: GBP3.3bn) with 95% and 81% of
projected FY22 and FY23 revenue secured.
-- Interim dividend up 83% to 2.2p per share (H1 2021: 1.2p),
with improved future dividend cover now set at 2.0x annual
earnings.
-- Enlarged Environment business has successfully integrated the
nmcn water business acquired in October 2021, enhancing service
delivery and capabilities.
-- Delivering on our Sustainable Growth Strategy and on track
for our financial targets to 2026 and carbon reduction
commitments.
H1 2022 H1 2022 H1 2021(3)
Pre-exceptional(1) Post-exceptional
(1)
Revenue GBP594m GBP594m GBP542m
Operating profit/(loss) before GBP6.9m GBP(2.8)m GBP3.9m
amortisation
Divisional operating margin(2) 2.2% n/a 1.6%
Profit/(loss) before tax GBP7.1m GBP(2.6)m GBP4.1m
Earnings/(loss) per share 5.9p (1.2)p 3.4p
Interim dividend per share 2.2p 2.2p 1.2p
Average month end cash GBP180m GBP180m GBP158m
Order book GBP3.4bn GBP3.4bn GBP3.3bn
1. H1 2022 GBP9.7m exceptional items relate to the acquisition
of nmcn's water business (GBP6.3m) and the implementation of
cloud-based ERP systems (GBP3.4m). There were no exceptional items
in H1 2021.
2. Operating margin is defined as pre-exceptional operating
profit before amortisation as a percentage of revenue.
3. H1 2021 financial information relates to continuing operations, unless otherwise stated.
Bill Hocking, Chief Executive, commented:
"The Group has continued to perform well in the first half of
the financial year, successfully managing industry-wide material
shortages and inflation. I am pleased to report that we are making
good progress against our Sustainable Growth Strategy, and our
target of 3% divisional operating margin across Building and
Infrastructure.
The acquisition of nmcn's water businesses is fully aligned with
our strategy and offers significant opportunity for our growing
Environment business - enhancing our water, engineering, off-site
build and asset optimisation capabilities.
I am excited about the future given our excellent people, strong
balance sheet, market leading sector positions, investment in
supplier relationships and high-quality order book. The Group
continues to trade well and is well placed to continue to deliver
strong performance and long-term sustainable value for all our
stakeholders."
Enquiries to:
Bill Hocking, Chief Executive
Galliford Try Andrew Duxbury, Finance Director 01895 855001
James Macey White
Tulchan Communications Victoria Boxall 020 7353 4200
This announcement contains inside information. The person
responsible for making this announcement on behalf of Galliford Try
is Kevin Corbett, General Counsel & Company Secretary.
Galliford Try's next Trading Update is scheduled for 14 July
2022. A two-hour business presentation for analysts and investors,
focusing on selected key sectors, is being planned for May 2022,
and further details will be published in due course.
Presentations
A conference call for analysts and institutional investors will
be held at 09:30am GMT today, Thursday 3 March 2022. To register
for this event please follow this link:
https://webcasting.brrmedia.co.uk/broadcast/61fa51a103a82511450ab572
Should you wish to ask a question, please dial-in on +44 (0)330
336 9601 using confirmation code 5532111, as it will not be
possible to submit a question via the webcast link.
An open presentation and Q&A session for retail investors
will be held on 7 March 2022 at 2.30pm GMT. Investors can register
for the event via this link
https://www.investormeetcompany.com/galliford-try-holdings-plc/register-investor
STRATEGY
In September 2021 we set out our Sustainable Growth Strategy
which balances financial targets with wider commitments and
aspirations to create long term value for all our stakeholders. The
Group will deliver sustainable and profitable revenue growth
through:
-- our continued focus on the public and regulated sectors, and
work with high-quality private sector clients, and
-- delivering for our clients through our regional building
businesses and national highways and environment businesses.
Our Sustainable Growth Strategy is supported by current market
conditions and benefits from our continuing focus on risk
management. We are making good progress against our financial
targets to 2026, which we set out at the Full Year 2021 results in
September 2021:
Divisional operating 3.0% across Building and Infrastructure, with a focus
margin on bottom line growth
Revenue growing towards GBP1.6bn, through disciplined contract
selection and sustainable profitable growth
Cash strong balance sheet and operating cash generation
Dividends sustainable dividends, with dividend cover of 2.0 times
annual earnings
The Group's strategic priorities are a progressive culture,
socially responsible delivery, focus on quality and innovation, and
sustainable financial returns. Our clear strategy will:
-- retain our strong platform for sustainable growth, with a
particular focus on our progressive culture, appropriate risk
management and commercial discipline;
-- improve our operational performance and drive margin progression; and
-- deliver strong predictable cash flows, margin growth and sustainable returns.
RISK MANAGEMENT AND ORDER BOOK
Fundamental to the Group's strategy is management's focus on
commercial discipline and appropriate risk management, and this is
reflected in the quality of contracts in our order book. Over 87%
of the contracts in our order book are sourced from frameworks,
which provide a pipeline of work with repeat clients using
established terms and conditions.
At 31 December 2021 the Group had a high-quality order book of
GBP3.4bn (H1 2021: GBP3.3bn) of which 90% is in the public and
regulated sectors and 10% is in the private sector. 95% of
projected revenue for the current financial year is secured, and
81% is secured for the next financial year (H1 2021: 96% and 76%
respectively).
OUTLOOK
The Group continues to trade well, delivering controlled growth
and margin improvement in line with our plan to operate sustainably
and deliver increased shareholder value.
Our strong financial position, disciplined approach to bidding
and project management, and active engagement with our supply chain
have proved particularly important during the recent period of
industry-wide materials shortages and inflation. We are continuing
to manage these challenges effectively and without any material
impact on trading.
We are encouraged by the pipeline of new opportunities across
our chosen sectors, which align with our Sustainable Growth
Strategy. We have a strong track record and focus on the public and
regulated sectors, are well placed to benefit from increasing
Government investment in economic and social infrastructure, and
our pipeline of work with high quality private sector clients
remains robust.
The Group's strong balance sheet continues to be a
differentiator, supporting our ability to win high quality
contracts and framework positions as well as providing confidence
to our supply chain. We are well positioned to capitalise on
current market conditions and are operating in sectors with
significant future opportunities.
DIVID AND CAPITAL ALLOCATION
The Board continues to prioritise maintaining a strong balance
sheet with key capital allocation objectives being:
- Supporting operational requirements and strategic opportunities
A strong balance sheet is an important element in delivering the
Group's Sustainable Growth Strategy, as it provides a competitive
advantage in the market, supports the Group's disciplined approach,
and provides confidence to our clients and supply chain.
Furthermore, and as demonstrated by the recent acquisition of the
water businesses of nmcn, a strong cash balance sheet enables the
Group to react quickly to strategic opportunities, including
bolt-on acquisitions that enhance our capabilities and increase
future value.
- Mitigating the effect of future market downturns
The current outlook across our markets remains very encouraging
and supports our strategy, but the Group ensures that it is
prepared for any adverse change in market conditions that may
arise. Our strong balance sheet is particularly important for the
Group to continue to operate its disciplined approach to contract
selection and focus on operating margin, irrespective of any short
term economic concerns. The recent inflationary pressures clearly
demonstrate the value and importance of the Group's risk management
framework and focus.
- Paying sustainable dividends to shareholders
The Board understands the importance of dividends to
shareholders, and in setting its dividend considers the Group's
profitability, its strong balance sheet, high quality order book
and longer term prospects. Consistent with this approach the Group
expects dividend per share to increase in line with earnings, with
dividend cover of 2.0 times annual earnings (improved compared to
the previously stated cover range of 2.0 to 2.5 times
earnings).
We continue to assess the cash requirements of the business to
ensure the Group remains well positioned to deliver on its
Sustainable Growth Strategy and has sufficient funds to invest in
the business. Given the capital allocation priorities and
requirements set out above, the Board does not expect the average
month-end cash requirements of the Group to increase at the same
rate as either revenue or profit before tax as we deliver our
financial targets to June 2026. If average month-end cash
sustainably increases above the level required, then the Board will
consider making additional returns to shareholders.
In the context of the framework set out above, the directors
have reviewed the Group's pre-exceptional results and the
encouraging outlook for the current financial year and have
declared an interim dividend of 2.2p per share which will be paid
on 8 April 2022 to shareholders on the register at the close of
business on 11 March 2022.
OPERATING SUSTAINABLY
Operating sustainably is at the heart of our strategy, as is
responding to stakeholder needs and creating long-term value. This
comes from the recognition that being sustainable makes us more
efficient, helps us to win work, engages our employees and benefits
communities and the environment.
We have continued to make significant progress across all six
pillars of our sustainability agenda, which are mapped to the UN
Sustainable Development Goals:
Health, safety and wellbeing
The health, safety and wellbeing of our staff, subcontractors,
suppliers, clients and the public remains the Group's top priority.
This was reflected in our employee survey, where our highest
scoring area was health and safety, with 95% of respondents stating
we give health and safety high priority. We were awarded
Construction News' Health and Safety Excellence Award for our
Anstey Lane project which saw no accidents or safety incidents
across 93,000 hours worked.
We continue to prioritise proactive management measures in our
pursuit of no harm. This is driven by our behavioural safety
programme, Challenging Beliefs, Affecting Behaviour, which is based
on awareness, training, coaching and visible leadership, and forms
the backbone of our approach. As the business grows, we want to
ensure our health and safety processes are tailored to the size and
scope of our activities.
All our workplaces continue to have specific Covid-19 risk
assessments to ensure works are carried out safely in accordance
with the latest industry and Government guidance.
Our people
Success comes from our people, which is why we put such a focus
on being a people-orientated, progressive business, driven by our
values. In an increasingly competitive market for talent, we seek
to retain and attract talented individuals, creating an inclusive
environment where they are motivated to give their best.
In our latest 2021 employee survey, our employee advocacy score
was 85%. We also achieved an excellent engagement score of 72%,
which is above both the UK and construction sector benchmarks of
71% and 70% respectively.
Early careers are the focus of many of our recruitment
activities, as they allow us to grow our own talent. Our Graduate
Programme and apprenticeships and traineeships remain popular, with
6.2% of our workforce in early careers positions. We are a gold
member of the 5% club, an organisation focused on investing in the
next generation. We are continuing to address the historic
under-representation of women in the construction industry with
female representation across our business now at 20.6%.
Our Employee Forum, chaired by the Group's Senior Independent
Director, provides direct engagement with individuals from across
the Group and enables us to better understand how we can be an
employer of choice. Insights from the forum have guided our
approach to mental health and wellbeing and supporting staff
through the pandemic.
Environment and climate change
Tackling climate change is an essential sustainability priority
for us as a business and many of our clients, investors, people and
regulators.
We have pledged to achieve net zero carbon across our own
operations by 2030, widening that scope to include all activities
by 2045 at the latest. To provide a clear route to reduce
greenhouse gas emissions, we have also committed to setting and
achieving a science-based target verified by the Science Based
Targets initiative (SBTi). In doing so, we have joined the Business
Ambition for 1.5degC to limit global warming to 1.5 degrees and the
UN-backed campaign Race to Zero. In December, we were named as an
official Business Champion of the Construction Leadership Council's
CO2nstruct Zero programme.
We have established a cross-disciplinary Carbon Reduction
Working Group which co-ordinates our carbon reduction initiatives
across a range of areas including the development of carbon
calculator tools, expanded scope 3 reporting, employee carbon
literacy training and supply chain engagement. We are focusing on
how we design, build and maintain low carbon infrastructure and
buildings, consideration of appropriate materials and construction
methodologies, operational energy consumption and end-of-life
decommissioning, working closely with clients, designers, and our
supply chain.
We are already well advanced on our carbon reduction journey
across our own operations. We manage and mitigate our environmental
impacts through our ISO 14001 certified management system and have
further reduced carbon dioxide equivalent emissions (Scope 1, 2 and
operational Scope 3) in 2021.
Clients
Delivering excellence for our clients is important to the
long-term sustainability of our business. We work in partnership
with our clients to deliver high-quality, sustainable buildings and
infrastructure, using the latest technology and innovation to
improve quality, value and productivity.
Our focus on building trusted relationships with our clients is
reflected in the fact that 93% of work in our order book is repeat
business. We achieve this through adherence to our Business
Management System, underpinned by our accreditation to the ISO
44001 Collaborative Business Relationships Standard, placing the
client at the heart of what we do.
Communities
Delivering a legacy of positive social value outcomes in the
communities in which we operate is an integral part of our
strategy. This is the right thing to do as a responsible business
and it is also an increasingly important priority for our clients.
During the year, we continued to develop the tools that we use to
capture and monitor the positive social value outcomes that we are
delivering to the wider community, including the impact on the
local economy through job creation and spend with the local supply
chain, apprenticeships, work experience, training, and
volunteering.
The Group achieved an average Considerate Constructors Scheme
score of 41.1 (HY 2021: 40.3), which exceeds the industry average
of 38.5 (2021: 37.8).
Supply chain
As a socially responsible organisation, we are committed to
maintaining relationships with our supply chain and prompt payment
is at the core of that. We pay 98% of invoices within 60 days,
exceeding the target of 95% set by the Prompt Payment Code
(PPC).
Our Advantage through Alignment programme provides selected
suppliers with greater insight into our operations and pipeline and
provides access to our training programmes.
We continue to retain Gold status from the Supply Chain
Sustainability School, an award-winning collaboration designed to
upskill its members through free training and resources covering
sustainability, off-site manufacturing and BIM.
FINANCIAL REVIEW
The Group has delivered further good operational progress and
maintained its strong financial position, performing well against
our Sustainable Growth Strategy and remaining on track to deliver
against our financial targets to 2026, with performance for the
period in line with the Board's expectations.
Revenue for the half year to 31 December 2021 increased 10% to
GBP594.0m (H1 2021: GBP541.7m). This increase reflects disciplined
growth in both Building and Infrastructure.
Pre-exceptional operating profit before amortisation increased
to GBP6.9m (H1 2021: GBP3.9m). Building generated profit of GBP8.4m
(H1 2021: GBP6.0m), representing an operating margin of 2.2% (H1
2021: 1.6%), and Infrastructure generated profit of GBP4.3m (H1
2021: GBP2.4m), representing an operating margin of 2.1% (H1 2021:
1.5%). The combined divisional operating margin was 2.2% (H1 2021:
1.6%), with the improvement progressing in line with our strategic
targets. Net interest income was GBP1.4m (H1 2021: GBP1.2m).
Pre-exceptional profit before tax was GBP7.1m (H1 2021:
GBP4.1m). Exceptional items of GBP9.7m have been incurred in the
period, resulting in a post-exceptional loss before tax of GBP2.6m.
As set out in note 5 to the financial information, GBP6.3m relates
to the acquisition and integration of the nmcn water businesses,
acquired in October 2021, and GBP3.4m relates to our investment in
cloud-based enterprise resource planning (ERP) systems as required
by accounting guidance. There were no exceptional items in H1
2021.
The pre-exceptional taxation charge of GBP0.6m reflects a
forecast effective tax rate of 8.9% (H1 2021: 7.1%) for the year to
30 June 2022.
Based on pre-exceptional earnings per share of 5.9p (H1 2021:
3.4p), and the outlook for the remainder of the financial year, the
Board has declared an interim dividend of 2.2p (H1 2021: 1.2p).
As previously disclosed, the Group provided services in respect
of three contracts with entities owned by a major infrastructure
fund of a blue-chip listed company. Our work on these contracts
formally ceased following their termination in August 2018. Costs
were significantly impacted by client-driven scope changes and the
Group has submitted claims and variations to the value of circa
GBP95m in respect of these costs (June 2021: GBP95m). The Group is
progressing recovery having received extensive advice on our
entitlement, and we have been successful in two adjudications
supporting the validity of the Group's position. Taking into
account the requirements of IFRS 15, the Group constrained the
revenue recognised in prior periods to the extent that it is highly
probable not to result in a significant reversal in the future. As
at 31 December 2021 the Group has updated its assessed
recoverability in accordance with IFRS 15 and expected credit loss
provision in accordance with IFRS 9, both of which assessments are
unchanged in the period.
Our strong balance sheet is important to our clients and supply
chain and enables the Group to maintain appropriate discipline when
bidding for new work. We are pleased to have reported further
improvements in our prompt payment performance in the period to 31
December 2021, with 98% of invoices paid within 60 days and average
days to pay reduced to 25.
The acquisition of nmcn's water businesses in October 2021 has
resulted in an increase in intangible assets of GBP5.8m and in
goodwill of GBP6.5m. The acquisition is an excellent strategic fit
with our existing Environment business and has also increased our
operational capabilities. The acquisition has contributed GBP12.7m
turnover and GBP0.6m of pre-exceptional profit in the period.
Further details are set out in note 17 to the financial
information.
The Group is well capitalised, maintaining its focus on
disciplined cash management in line with the Board's key capital
allocation objectives. The Group operates with daily net cash, no
debt facilities, and no defined benefit pension liabilities.
Average month end cash balances for the first half year were strong
at GBP180m. The Group also benefits from a PPP asset portfolio of
GBP48.3m, reflecting a blended 7% discount rate and generating
interest income as set out above.
OPERATIONAL REVIEW
Building
Building operates through 12 regional offices, serving a range
of public and commercial clients across the UK, with a focus on the
Education, Defence, Justice and Health sectors, where we have core
and proven strengths. Building also has a substantial presence in
Scotland operating as Morrison Construction. Our FM business
complements these operations by providing building maintenance
services and we continue to grow the capabilities of this
operation.
H1 2022 H1 2021 Change
Revenue (GBPm) 386.2 374.5 +3.1%
Operating profit before
amortisation (GBPm) 8.4 6.0 +40%
Operating margin (%) 2.2 1.6 +0.6ppt
Order book (GBPbn) 2.0 2.0 - %
Building generated revenue of GBP386.2m (H1 2021: GBP374.5m).
Operating profit before amortisation was GBP8.4m (H1 2021:
GBP6.0m), resulting in an improved operating margin of 2.2% (H1
2021: 1.6%). The margin increase reflects encouraging performance
of projects across the business and our strategy of focusing on
bottom line growth.
During the first six months of the year, Building won contracts
and framework positions across our chosen sectors. These
appointments included:
-- the new four-year GBP1.6bn LHC Public Buildings, Construction
and Infrastructure PB3 framework which
covers projects across all public sector buildings,
-- a share of the GBP7bn Department for Education 2021 Construction Framework,
-- the GBP55m Galashiels Community Campus on behalf of Scottish
Borders Council and Hub South East, and
-- a GBP56m private rented sector (PRS) scheme in Milton Keynes.
Building currently has an order book of GBP2.0bn (H1 2021:
GBP2.0bn), including 34% in Education, 18% in Defence and
Custodial, 19% in Facilities Management and 12% in Health.
Infrastructure
Infrastructure carries out civil engineering projects across the
UK, primarily Highways and Environment (incorporating principally
our activities in water and wastewater). This business maintains
long-term relationships with customers with whom we have a strong
track record, focusing on public and regulated sector work and bids
with early contractor involvement.
H1 2022 H1 2021 Change
Revenue (GBPm) 204.4 164.1 +24.6%
Operating profit before amortisation
(GBPm) 4.3 2.4 +79.2%
Operating margin (%) 2.1 1.5 +0.6ppt
Order book (GBPbn) 1.4 1.3 +7.7%
Infrastructure grew revenue to GBP204.4m (H1 2021: GBP164.1m),
as the AMP7 water programmes increased activity. Operating profit
before amortisation and exceptional items was GBP4.3m (H1 2021:
GBP2.4m), with a 2.1% operating margin (H1 2021: 1.5%).
Following the acquisition of nmcn's water businesses, in October
2021, we have restructured our Environment business to provide
enhanced service delivery across UK operations including water,
engineering, off-site build and asset optimisation, and asset
security. The acquisition has provided the Group with additional
geographic scale and increased capabilities in the water sector. We
have made excellent progress on the integration in the period.
During the first six months of the year, Infrastructure won
contracts and positions on frameworks worth GBP174m in addition to
the contract positions acquired with nmcn. These appointments
included our share of the GBP3.5bn Scheme Delivery Framework for
National Highways.
Infrastructure currently has an order book of GBP1.4bn (H1 2021:
GBP1.3bn) comprising GBP510m in Highways and GBP860m in
Environment.
PPP Investments
PPP Investments delivers major building and infrastructure
projects through public private partnerships, generating work for
the wider Group in the process. The business leads bid consortia
and arranges finance, making equity investments and managing
construction through to operations. PPP Investments supports our
Building and Infrastructure businesses and is currently increasing
its co-development and investment activities in the private rental
sector (PRS).
H1 2022 H1 2021 Change
Revenue (GBPm) 3.4 3.1 +9.7%
Operating (loss) (GBPm) (0.5) (0.7) +28.6%
Asset valuation (GBPm) 48.3 44.1 +GBP4.2m
Net interest income (GBPm) 2.0 1.8 +GBP0.2m
With the reduction in traditional PPP/PFI bidding opportunities,
PPP Investments has continued to move its focus towards
co-development projects. During the half year, it successfully
achieved planning on its first PRS scheme, which is expected to
start on site during 2022.
For the first half of 2021, revenue was GBP3.4m (H1 2021:
GBP3.1m), on which the loss from operations was GBP0.5m (H1 2021:
GBP0.7m loss).
At 31 December 2021 the Group directors' valuation of our PPP
portfolio was GBP48.3m (H1 2021: GBP44.1m; June 2021: GBP49.1m),
reflecting a blended 7.0% discount rate (H1 2021: 8.0%: June 2021
7.0%). These assets contribute to our balance sheet strength and
generated interest income in the period of GBP2.0m (H1 2021:
GBP1.8m).
Condensed consolidated income statement
for the half year ended 31 December 2021 (unaudited)
Half year Half year Half year Half year Year to
to to to to 30 June
31 December 31 December 31 December 31 December 2021 (audited)
2021 2021 2021 2020 Total
Pre-exceptional Exceptional Total Total
items items (note
5)
Notes GBPm GBPm GBPm GBPm GBPm
---------------------------- ------ ----------------- ------------- ------------- ------------- ----------------
Revenue 3, 4 594.0 - 594.0 541.7 1,124.8
Cost of sales (554.5) (5.2) (559.7) (508.7) (1,049.7)
---------------------------- ------ ----------------- ------------- ------------- ------------- ----------------
Gross profit/(loss) 39.5 (5.2) 34.3 33.0 75.1
Administrative
expenses (33.8) (4.5) (38.3) (30.1) (67.1)
Operating profit/(loss) 5.7 (9.7) (4.0) 2.9 8.0
Share of post-tax
profit from joint
ventures - - - - 0.5
Finance income 6 2.1 - 2.1 1.9 4.1
Finance costs 6 (0.7) - (0.7) (0.7) (1.2)
---------------------------- ------ ----------------- ------------- ------------- ------------- ----------------
Profit/(loss)
before income
tax 7.1 (9.7) (2.6) 4.1 11.4
Income tax (expense)/credit 7 (0.6) 1.9 1.3 (0.3) (1.0)
---------------------------- ------ ----------------- ------------- ------------- ------------- ----------------
Profit/(loss)
from continuing
operations for
the period 6.5 (7.8) (1.3) 3.8 10.4
Loss from discontinued
operations, net
of income tax
for the period - - - (2.1) (2.7)
Profit/(loss)
for the period 6.5 (7.8) (1.3) 1.7 7.7
---------------------------- ------ ----------------- ------------- ------------- ------------- ----------------
Earnings per share
Basic
- Profit/(loss) from continuing operations attributable
to ordinary shareholders
9 5.9p (1.2)p 3.4p 9.5p
- Profit/(loss) attributable to ordinary shareholders
9 5.9p (1.2)p 1.5p 7.0p
Diluted
- Profit/(loss) from continuing operations attributable
to ordinary shareholders
9 5.6p (1.2)p 3.4p 9.1p
- Profit/(loss) attributable
to ordinary shareholders
9 5.6p (1.2)p 1.5p 6.8p
---------------------------- ------ ----------------- ------------- ------------- ------------- ----------------
The notes are an integral part of the condensed consolidated
half year financial statements.
Condensed consolidated statement of comprehensive income
for the half year ended 31 December 2021 (unaudited)
Half year Half year
to to Year to
30 June
31 December 31 December 2021
2021 2020 (audited)
Notes GBPm GBPm GBPm
--------------------------------------------- ------ ------------- ------------- -----------
(Loss)/profit for the period (1.3) 1.7 7.7
Other comprehensive (expense)/income:
Items that may be reclassified subsequently
to profit or loss
Movement in fair value of PPP and other
investments - continuing operations 11 (0.4) 3.6 7.3
Total items that may be reclassified
subsequently to profit or loss (0.4) 3.6 7.3
Other comprehensive (expense)/income
for the period net of tax (0.4) 3.6 7.3
--------------------------------------------- ------ ------------- ------------- -----------
Total comprehensive (expense)/income
for the period (1.7) 5.3 15.0
--------------------------------------------- ------ ------------- ------------- -----------
The notes are an integral part of the condensed consolidated
half year financial statements.
Condensed consolidated balance sheet
at 31 December 2021 (unaudited)
31 December 31 December 30 June 2021
2021 2020
(audited)
Notes GBPm GBPm GBPm
------------------------------- ------ ------------ ------------ -------------
Assets
Non-current assets
Intangible assets 17 10.3 6.8 5.7
Goodwill 10 83.7 77.2 77.2
Property, plant and equipment 3.6 3.8 4.4
Right of use assets 21.9 20.0 19.5
Investments in joint ventures 0.2 - 0.2
PPP and other investments 11 48.3 44.1 49.1
Deferred income tax assets 14.1 7.3 14.3
------------------------------- ------ ------------ ------------ -------------
Total non-current assets 182.1 159.2 170.4
------------------------------- ------ ------------ ------------ -------------
Current assets
Trade and other receivables 12 235.1 230.9 243.3
Current income tax assets 8.0 15.8 8.8
Cash and cash equivalents 211.1 211.1 216.2
------------------------------- ------ ------------ ------------ -------------
Total current assets 454.2 457.8 468.3
------------------------------- ------ ------------ ------------ -------------
Total assets 636.3 617.0 638.7
------------------------------- ------ ------------ ------------ -------------
Liabilities
Current liabilities
Trade and other payables 13 (487.2) (471.9) (485.4)
Lease liabilities (8.5) (8.2) (7.3)
Total current liabilities (495.7) (480.1) (492.7)
------------------------------- ------ ------------ ------------ -------------
Non-current liabilities
Lease liabilities (13.4) (11.2) (11.9)
Total non-current liabilities (13.4) (11.2) (11.9)
------------------------------- ------ ------------ ------------ -------------
Total liabilities (509.1) (491.3) (504.6)
------------------------------- ------ ------------ ------------ -------------
Net assets 127.2 125.7 134.1
------------------------------- ------ ------------ ------------ -------------
Equity
Ordinary shares 55.5 55.5 55.5
Other reserves 118.4 85.7 118.4
Retained earnings (46.7) (15.5) (39.8)
------------------------------- ------ ------------ ------------ -------------
Total shareholders' equity 127.2 125.7 134.1
------------------------------- ------ ------------ ------------ -------------
The notes are an integral part of the condensed consolidated
half year financial statements.
Condensed consolidated statement of changes in equity
for the half year ended 31 December 2021 (unaudited)
Ordinary Other Retained Total shareholders'
shares reserves earnings equity
Notes GBPm GBPm GBPm GBPm
--------------------------------- ------ --------- ---------- ---------- --------------------
As at 31 December 2021
At 30 June 2021 55.5 118.4 (39.8) 134.1
Loss for the period - - (1.3) (1.3)
Other comprehensive expense - - (0.4) (0.4)
--------- ---------- ---------- --------------------
Total comprehensive expense for
the period - - (1.7) (1.7)
Transactions with owners:
Dividends 8 - - (3.9) (3.9)
Share-based payments - - 0.7 0.7
Purchase of own shares - - (2.0) (2.0)
At 31 December 2021 55.5 118.4 (46.7) 127.2
--------------------------------- ------ --------- ---------- ---------- --------------------
As at 31 December 2020
At 30 June 2020 55.5 85.7 (20.7) 120.5
Profit for the period - - 1.7 1.7
Other comprehensive income - - 3.6 3.6
--------- ---------- ---------- --------------------
Total comprehensive income for
the period - - 5.3 5.3
Transactions with owners:
Share-based payments - - 0.3 0.3
Purchase of own shares - - (0.4) (0.4)
At 31 December 2020 55.5 85.7 (15.5) 125.7
--------------------------------- ------ --------- ---------- ---------- --------------------
As at 30 June 2021 (audited)
At 30 June 2020 55.5 85.7 (20.7) 120.5
Profit for the year - - 7.7 7.7
Other comprehensive income - - 7.3 7.3
----- ------ ------- ------
Total comprehensive income for
the year - - 15.0 15.0
Transactions with owners:
Dividends 8 - - (1.3) (1.3)
Purchase of shares - - (1.1) (1.1)
Share-based payments - continuing
operations - - 1.0 1.0
Recycling of retained earnings
to merger reserve on reversal
of impairment of investment in
Galliford Try Limited - 32.7 (32.7) -
At 30 June 2021 55.5 118.4 (39.8) 134.1
----------------------------------- ----- ------ ------- ------
The notes are an integral part of the condensed consolidated
half year financial statements.
Condensed consolidated statement of cash flows
for the half year ended 31 December 2021 (unaudited)
Half year Half year
to to Year to
31 December 31 December 30 June
2021 2020 2021 (audited)
GBPm GBPm GBPm
----------------------------------------------------- ------------ ------------ ---------------
Cash flows from operating activities
Pre-exceptional profit for the period 6.5 1.7 7.7
Exceptional loss for the period (7.8) - -
------------ ------------ ---------------
(Loss)/profit for the period (1.3) 1.7 7.7
Adjustments for:
Loss from discontinued operations - 2.1 2.7
Income tax (credit)/expense- continuing operations (1.3) 0.3 1.0
Net finance income - continuing operations (1.4) (1.2) (2.9)
Depreciation and amortisation 7.7 7.4 13.3
Share-based payments 0.8 0.3 1.0
Share of post-tax profits from joint ventures - - (0.5)
Decrease in provisions - (0.3) (0.3)
------------------------------------------------------ ------------ ------------ ---------------
Net cash generated from operations before
changes in working capital 4.5 10.3 22.0
Decrease in trade and other receivables 14.7 17.8 9.4
(Decrease)/Increase in trade and other payables (20.1) (0.8) 27.4
------------------------------------------------------ ------------ ------------ ---------------
Net cash (used in)/generated from operations (0.9) 27.3 58.8
Interest received 2.1 1.9 4.1
Interest paid (0.7) (0.7) (1.2)
Net surplus returned on wind up of defined
benefit pension scheme - 1.0 1.0
Income tax received 2.0 4.5 4.5
------------------------------------------------------ ------------ ------------ ---------------
Net cash generated from operating activities
from continuing operations 2.5 34.0 67.2
Net cash used in operating activities from
discontinued operations - (2.6) (3.6)
------------------------------------------------------ ------------ ------------ ---------------
Net cash generated from operating activities 2.5 31.4 63.6
Cash flows from investing activities
Dividends received from joint ventures and
associates - - 0.5
Amounts received from joint ventures 3.9 - -
Amounts advanced to joint ventures - (1.0) (5.2)
Acquisition of PPP and other investments - - (1.9)
Proceeds from disposal of PPP and other investments 0.4 0.2 0.7
Acquisition of subsidiary net of cash received (0.3) - -
Acquisition of property, plant and equipment (0.6) (0.7) (2.1)
Net cash generated from/(used in) investing
activities from continuing operations 3.4 (1.5) (8.0)
Net cash used in investing activities from
discontinued operations - (10.0) (23.7)
------------------------------------------------------ ------------ ------------ ---------------
Net cash generated from/(used in) investing
activities 3.4 (11.5) (31.7)
Cash flows from financing activities
Repayment of lease liabilities (5.1) (5.6) (10.5)
Purchase of own shares (2.0) (0.4) (1.1)
Dividends paid to Company shareholders (3.9) - (1.3)
------------------------------------------------------ ------------ ------------ ---------------
Net cash used in financing activities (11.0) (6.0) (12.9)
Net (decrease)/increase in cash and cash equivalents (5.1) 13.9 19.0
------------------------------------------------------ ------------ ------------ ---------------
Cash and cash equivalents at beginning of
period 216.2 197.2 197.2
------------------------------------------------------ ------------ ------------ ---------------
Cash and cash equivalents at end of period 211.1 211.1 216.2
------------------------------------------------------ ------------ ------------ ---------------
Notes to the condensed consolidated half year financial
statements
for the half year ended 31 December 2021 (unaudited)
1. Basis of preparation
Galliford Try Holdings plc is a public limited company
incorporated in England and Wales and domiciled in the UK. The
address of its registered office is Blake House, 3 Frayswater
Place, Cowley, Uxbridge, Middlesex, UB8 2AD. The Company has its
listing on the London Stock Exchange. This condensed consolidated
half year financial information was approved for issue on 3 March
2022.
This condensed consolidated half year financial information does
not comprise statutory financial statements within the meaning of
Section 434 of the Companies Act 2006. Statutory financial
statements for the year ended 30 June 2021 were approved by the
board of directors on 16 September 2021 and delivered to the
Registrar of Companies. The report of the auditors on those
financial statements was unqualified, did not contain an emphasis
of matter paragraph and did not contain any statement under Section
498 of the Companies Act 2006.This condensed consolidated half year
financial information has been reviewed, not audited. The auditors'
review opinion is included in this report.
This condensed consolidated half year financial information for
the half year ended 31 December 2021 has been prepared in
accordance with the Disclosure Guidance and Transparency Rules of
the Financial Conduct Authority and with IAS 34, "Interim financial
reporting". The condensed consolidated half year financial
information should be read in conjunction with the annual financial
statements for the year ended 30 June 2021, which have been
prepared in accordance with IFRSs adopted pursuant to Regulation
(EC) No. 1606/2002 as it applies in the European Union.
On 31 December 2020, IFRS as adopted by the European Union at
that date was brought into UK law and became UK-adopted
international accounting standards, with future changes being
subject to endorsement by the UK Endorsement Board. The group
transitioned to UK-adopted international accounting standards in
its consolidated financial statements from the period commencing on
1 July 2021. There was no impact or changes in accounting policies
from the transition.
The Group's activities, together with the factors likely to
affect the future development, performance and position of the
business are set out in this half year report. The annual financial
statements for the year ended 30 June 2021 included the Group's
objectives, policies and processes for managing capital, its
financial risk management objectives, details of its financial
instruments and hedging activities and its exposure to credit risk
and liquidity risk.
After making enquiries, the directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. Accordingly, they
continue to adopt the going concern basis in preparing the
condensed consolidated half year financial information.
2 Accounting policies
The accounting policies applied are consistent with those of the
annual financial statements for the year ended 30 June 2021. The
Group follows and applies the agenda decisions of the IFRS
Interpretations Committee (IC) where relevant to the Group and as
soon as is practicable after the decision is issued. In particular,
the Group has incurred material customisation and configuration
costs associated with a cloud computing agreement during the
period. The IFRS IC issued a relevant agenda decision in March 2021
which the Group has followed leading to these costs being expensed
in the period (see note 5).
There are no new material accounting standards that have
impacted on the Group's reported results in the period.
Critical accounting estimates and judgements
With the exception of the judgements and estimates involved in
the acquisition of the nmcn water business (note 17), the Group's
other principal judgements and key sources of estimation
uncertainty remain unchanged since the year-end. The principal
judgements and key sources of estimation uncertainty are set out in
note 1 on pages 103 - 104 of the annual financial statements for
the year ended 30 June 2021.
The Group's five largest unagreed variations and claims
positions as at 31 December 2021 are summarised in aggregate below,
the most significant of which relates to three contracts with
entities owned by a major infrastructure fund of a blue-chip listed
company (note 12). Of these five projects, one is materially
complete:
GBPm
------------------------------------------------------------------- ------
Overall contract value (including total estimated end of contract
variations and claims after IFRS 15 constraints) 672.8
------------------------------------------------------------------- ------
Revenue in the period 44.1
------------------------------------------------------------------- ------
Total estimated end of contract variations and claims before
IFRS 15 constraints 193.7
------------------------------------------------------------------- ------
Total estimated end of contract variations and claims after
IFRS 15 constraints 64.8
------------------------------------------------------------------- ------
These five positions represent the most significant estimates of
revenue.
3 Segmental reporting
Segmental reporting is presented in the condensed consolidated
half year financial statements in respect of the Group's business
segments, which are the primary basis of segmental reporting. The
business segmental reporting reflects the Group's management and
internal reporting structure. Segmental results include items
directly attributable to the segment as well as those that can be
allocated on a reasonable basis. As the Group has no material
activities outside the UK, segmental reporting is not required by
geographical region.
The chief operating decision-makers ("CODM") have been
identified as the Group's Chief Executive and Finance Director. The
CODM review the Group's internal reporting in order to assess
performance and allocate resources. Management has determined the
operating segments of the resulting Group to be Building,
Infrastructure, PPP Investments and Central (primarily representing
central overheads).
The CODM assess the performance of the operating segments based
on a measure of adjusted earnings before finance costs,
amortisation, exceptional items and taxation. This measurement
basis excludes the effects of non-recurring expenditure from the
operating segments, such as restructuring costs and impairments
when the impairment is the result of an isolated, non-recurring
event. Interest income and expenditure are included in the result
for each operating segment that is reviewed by the CODM. Other
information provided to them is measured in a manner consistent
with that in the financial statements.
PPP
Building Infrastructure Investments Central Total
Half year to 31 December 2021 GBPm GBPm GBPm GBPm GBPm
Revenue 386.2 204.4 3.4 - 594.0
Pre-exceptional operating profit/(loss)
before amortisation of intangibles 8.4 4.3 (0.5) (5.3) 6.9
Finance income - 0.1 2.0 - 2.1
Finance costs (0.2) (0.3) - (0.2) (0.7)
------------------------------------------ --------- --------------- ------------- -------- ------
Pre-exceptional profit/(loss) before
amortisation and taxation 8.2 4.1 1.5 (5.5) 8.3
Exceptional items - (6.3) - (3.4) (9.7)
Amortisation of intangible assets (0.5) (0.2) - (0.5) (1.2)
------------------------------------------ --------- --------------- ------------- -------- ------
Profit/(loss) before taxation 7.7 (2.4) 1.5 (9.4) (2.6)
Income tax credit 1.3
------------------------------------------ --------- --------------- ------------- -------- ------
Loss for the period (1.3)
------------------------------------------ --------- --------------- ------------- -------- ------
PPP
Building Infrastructure Investments Central Total
Half year to 31 December 2020 GBPm GBPm GBPm GBPm GBPm
---------
Revenue 374.5 164.1 3.1 - 541.7
Operating profit/(loss) before amortisation
of intangibles 6.0 2.4 (0.7) (3.8) 3.9
Finance income - 0.1 1.8 - 1.9
Finance costs (0.2) (0.3) - (0.2) (0.7)
---------------------------------------------- --------- --------------- ------------- -------- ------
Profit/(loss) before amortisation
and taxation 5.8 2.2 1.1 (4.0) 5.1
Amortisation of intangible assets (0.5) - - (0.5) (1.0)
---------------------------------------------- --------- --------------- ------------- -------- ------
Profit/(loss) before taxation 5.3 2.2 1.1 (4.5) 4.1
Income tax expense (0.3)
---------------------------------------------- --------- --------------- ------------- -------- ------
Profit for the period 3.8
---------------------------------------------- --------- --------------- ------------- -------- ------
PPP
Building Infrastructure Investments Central Total
Year ended 30 June 2021 (audited) GBPm GBPm GBPm GBPm GBPm
Revenue 789.2 329.2 6.4 - 1,124.8
Operating profit/(loss) before amortisation
and taxation 15.9 6.0 (1.8) (10.0) 10.1
Share of post tax profits from joint
ventures - - 0.5 - 0.5
Finance income - 0.1 3.9 0.1 4.1
Finance costs (0.3) (0.6) - (0.3) (1.2)
---------------------------------------------- --------- --------------- ------------- -------- --------
Profit/(loss) before amortisation
and taxation 15.6 5.5 2.6 (10.2) 13.5
Amortisation of intangible assets (1.0) - - (1.1) (2.1)
---------------------------------------------- --------- --------------- ------------- -------- --------
Profit/(loss) before taxation 14.6 5.5 2.6 (11.3) 11.4
Income tax expense (1.0)
---------------------------------------------- --------- --------------- ------------- -------- --------
Profit for the year 10.4
---------------------------------------------- --------- --------------- ------------- -------- --------
Inter-segment revenue, which is priced on an arm's length basis,
is eliminated from revenue above. In the half year to 31 December
2021 this amounted to GBP18.2m (31 December 2020: GBP20.2m; 30 June
2021: GBP39.4m) for continuing operations, of which GBP0.1m (31
December 2020: GBP0.1m; 30 June 2021: GBPnil) was in Building,
GBP10.8m (31 December 2020: GBP12.5m; 30 June 2021: GBP24.7m) was
in Infrastructure and GBP7.3m (31 December 2020: GBP7.6m; 30 June
2021: GBP14.7m) was in Central costs.
PPP
Building Infrastructure Investments Central Total
Half year to 31 December 2021 GBPm GBPm GBPm GBPm GBPm
-------------------------------- ---------- --------------- ------------- -------- --------
Balance Sheet
Goodwill and intangible assets 42.4 49.4 - 2.2 94.0
Working capital employed (65.5) (159.6) 42.2 5.0 (177.9)
Net cash 77.6 55.9 (11.2) 88.8 211.1
Net assets/(liabilities) 54.5 (54.3) 31.0 96.0 127.2
Total Group liabilities (509.1)
--------------------------------- --------- --------------- ------------- -------- --------
Total Group assets 636.3
--------------------------------- --------- --------------- ------------- -------- --------
PPP
Building Infrastructure Investments Central Total
Half year to 31 December 2020 GBPm GBPm GBPm GBPm GBPm
----------------------------------- ------------ --------------- ------------- -------- --------
Balance Sheet
Goodwill and intangible assets 43.4 37.2 - 3.4 84.0
Working capital employed (170.2) (28.3) 39.3 (10.2) (169.4)
Net cash 125.7 (62.1) (10.6) 158.1 211.1
Net (liabilities)/assets (1.1) (53.2) 28.7 151.3 125.7
Total Group liabilities (491.3)
------------------------------------ ----------- --------------- ------------- -------- --------
Total Group assets 617.0
------------------------------------ ----------- --------------- ------------- -------- --------
PPP
Building Infrastructure Investments Central Total
Year ended 30 June 2021 (audited) GBPm GBPm GBPm GBPm GBPm
----------------------------------- ----------- --------------- ------------- -------- --------
Balance Sheet
Goodwill and intangible assets 42.9 37.2 - 2.8 82.9
Working capital employed (82.3) (132.0) 40.0 9.3 (165.0)
Net cash 87.0 44.6 (10.0) 94.6 216.2
------------------------------------ ----------- --------------- ------------- -------- --------
Net assets/(liabilities) 47.6 (50.2) 30.0 106.7 134.1
Total Group liabilities (504.6)
------------------------------------ ----------- --------------- ------------- -------- --------
Total Group assets 638.7
------------------------------------ ----------- --------------- ------------- -------- --------
4. Revenue
Nature of revenue streams
(i) Building & Infrastructure segments
Our Construction business operates nationwide, working with
clients predominantly in the public and regulated sectors. Projects
include the construction of assets (with services including design
and build, construction only and refurbishment) in addition to the
maintenance, renewal, upgrading and managing of services across
utility and infrastructure assets.
Revenue stream Nature, timing of satisfaction of performance obligations
and significant payment terms
Fixed price A number of projects within these segments are undertaken
using fixed-price contracts.
Contracts are typically accounted for as a single performance
obligation; even when a contract (or multiple combined contracts)
includes both design and build elements, they are considered
to form a single performance obligation as the two elements
are not distinct in the context of the contract given that
each is highly interdependent on the other.
The Group typically receives payments from the customer
based on a contractual schedule of value that reflects the
timing and performance of service delivery. Revenue is therefore
recognised over time (the period of construction) based
on an input model (reference to costs incurred to date).
Un-invoiced amounts are presented as contract assets.
Management does not expect a financing component to exist.
-------------------------------------------------------------------
Cost-reimbursable A number of projects within these segments are undertaken
using open-book/cost-plus/target-price (possibly with a
pain/gain share mechanism) contracts.
Contracts are typically accounted for as a single performance
obligation with the majority of these contracts including
a build phase only.
The Group typically receives payments from the customer
based on actual costs incurred. Revenue is therefore recognised
over time (the period of construction) based on an input
model (reference to costs incurred to date). Un-invoiced
amounts are presented as contract assets.
Management does not expect a financing component to exist.
-------------------------------------------------------------------
Facilities Contracts undertaken within the Building segment that provide
management full life-cycle solutions to clients, are accounted for
as a single performance obligation, with revenue recognised
over time and typically on a straight-line basis.
-------------------------------------------------------------------
(ii) Investments segment
Through public private partnerships, the business leads bid
consortia and arranges finance, makes debt and equity investments
(which are recycled) and manages construction through to
operations.
Revenue stream Nature, timing of satisfaction of performance obligations
and significant payment terms
PPP Investments The Group has investments in a number of PPP Special Purpose
Vehicles (SPVs), delivering major building and infrastructure
projects.
The business additionally provides management services to
the SPVs under Management Service Agreements (MSA). Revenue
for these services is typically recognised over time as
and when the service is delivered to the customer.
Revenue for reaching project financial close (such as success
fees) is recognised at a point in time, at financial close
(when control is deemed to pass to the customer).
---------------------------------------------------------------
Disaggregation of revenue
The Group considers the split of revenue by operating segment to
be the most appropriate disaggregation. All revenue has been
derived from performance obligations settled over time.
5. Exceptional items
Half year Half year Year to 30
to to June 2021
31 December 31 December
2021 2020 (audited)
GBPm GBPm GBPm
------------------------------------- ------------- ------------- -----------
Acquisition and integration related
costs (note 17)(1) - cost of sales 5.2 - -
Acquisition and integration related
costs (note 17)(1) - administrative
expenses 1.1 - -
Implementation costs of cloud based
arrangements(2) 3.4 - -
Operating loss 9.7 - -
------------------------------------- ------------- ------------- -----------
An associated tax credit of GBP1.9m has been recognised.
(1) The Group acquired the Water business of nmcn plc (in
administration) on 7 October 2021 and incurred acquisition and
integration related costs of GBP6.3m. This is made up of legal and
professional fees, integration and restructuring costs recognised
in administrative expenses, and specific staff costs incurred
during the period of site closures following nmcn plc entering
administration that are recognised in cost of sales.
(2) The Group incurred GBP3.4m of customisation and
configuration costs associated with the move to Oracle Fusion, a
cloud-based computing arrangement, during the period. Taking into
account the IFRIC Agenda Decision issued by the IFRS IC in March
2021, the Group has analysed the costs and concluded that these
costs should be expensed in the period. In accordance with the
Group's existing accounting policy, management considers that the
costs should be treated as exceptional because they are significant
and irregular.
6 Net finance income
Half year Half year Year to 30
to to June 2021
31 December 31 December
2021 2020 (audited)
Group GBPm GBPm GBPm
------------------------------------------ ------------- ------------- -----------
Interest receivable on bank deposits 0.1 - 0.1
Interest receivable from PPP investments
and joint ventures 2.0 1.8 3.9
Other - 0.1 0.1
------------------------------------------ ------------- ------------- -----------
Finance income 2.1 1.9 4.1
Other (including interest on lease
liabilities) (0.7) (0.7) (1.2)
------------------------------------------ ------------- ------------- -----------
Finance costs (0.7) (0.7) (1.2)
Net finance income 1.4 1.2 2.9
------------------------------------------ ------------- ------------- -----------
7 Income tax expenses
The taxation expense on profit for pre-exceptional operations
for the period of 8.9% (31 December 2020: 7.1%, 30 June 2021: 8.8%)
reflects the expected pre-exceptional effective tax rate for the
year to 30 June 2022. The lower than standard rate reflects the
anticipated utilisation of tax credits on historic contract
losses.
8 Dividends
The following dividends were paid and recognised by the Company
in each accounting period presented:
Half year to 31 Half year to 31 Year to 30 June
December 2021 December 2020 2021 (audited)
------------------ ------------------ ------------------
pence per pence per pence per
GBPm share GBPm share GBPm share
--------------------- ------ ---------- ------ ---------- ------ ----------
Previous year net
final 3.9 3.5 - - - -
Current period
interim - - - - 1.3 1.2
Dividend recognised
in the year 3.9 3.5 - - 1.3 1.2
--------------------- ------ ---------- ------ ---------- ------ ----------
The following dividends were declared by the Company in respect
of each accounting period presented:
Half year to 31 Half year to 31 Year to 30 June
December 2021 December 2020 2021 (audited)
------------------ ------------------ ------------------
pence per pence per pence per
GBPm share GBPm share GBPm share
------------------- ------ ---------- ------ ---------- ------ ----------
Interim 2.4 2.2 1.3 1.2 1.3 1.2
Final - - - - 3.9 3.5
Dividend relating
to the year 2.4 2.2 1.3 1.2 5.2 4.7
------------------- ------ ---------- ------ ---------- ------ ----------
The interim dividend for 2022 of 2.2p per share was approved by
the board on 3 March 2022 and has not been included as a liability
as at 31 December 2021. This interim dividend will be paid on 8
April 2022 to shareholders who are on the register at the close of
business on 11 March 2022.
9 Earnings per share
Basic and diluted earnings per share
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the year, excluding
those held by the Employee Share Trust, which are treated as
cancelled.
The average number of shares is diluted by reference to the
average number of potential ordinary shares held under option in
the period. The dilutive effects amounts to the number of ordinary
shares which would be purchased using the aggregate difference in
value between the market value of shares and the share option
price. Only shares that have met their cumulative performance
criteria are included in the dilution calculation. The Group has
two classes of potentially dilutive ordinary shares: those share
options granted to employees where the exercise price is less than
the average market price of the Company's ordinary shares during
the year and the contingently issuable shares under the Group's
long term incentive plans. A loss per share cannot be reduced
through dilution, hence this dilution is only applied where the
Group has reported a profit.
The earnings and weighted average number of shares used in the
calculations are set put below.
Half year to 31 December Half year to 31 December Year to 30 June 2021
2021 2020 (audited)
---------------------------------- ---------------------------------- ---------------------------------
Weighted Per Weighted Per Weighted Per
average share average share average share
Earnings number amount Earnings number amount Earnings number amount
GBPm of shares pence GBPm of shares pence GBPm of shares pence
Continuing
operations
Basic EPS -
pre-exceptional
Pre-exceptional
earnings
attributable
to ordinary
shareholders 6.5 109,654,473 5.9 3.8 110,528,919 3.4 10.4 109,976,145 9.5
Basic EPS
Earnings
attributable
to ordinary
shareholders
post
exceptional
items (1.3) 109,654,473 (1.2) 3.8 110,528,919 3.4 10.4 109,976,145 9.5
Effect of
dilutive
securities:
Options n/a 6,033,488 n/a n/a 2,801,321 n/a n/a 3,804,698 n/a
Diluted EPS -
pre-exceptional 6.5 115,687,961 5.6 3.8 113,330,240 3.4 10.4 113,780,843 9.1
Diluted EPS (1.3) 115,687,961 (1.2) 3.8 113,330,240 3.4 10.4 113,780,843 9.1
----------------- --------- ------------ --------- --------- ------------ --------- --------- ------------ --------
Half year to 31 December Half year to 31 December Year to 30 June 2021
2021 2020 (audited)
---------------------------------- ---------------------------------- ---------------------------------
Weighted Per Weighted Per Weighted Per
average share average share average share
Earnings number amount Earnings number amount Earnings number amount
GBPm of shares pence GBPm of shares pence GBPm of shares pence
Total operations
Basic EPS -
pre-exceptional
Pre-exceptional
earnings
attributable
to ordinary
shareholders 6.5 109,654,473 5.9 1.7 110,528,919 1.5 7.7 109,976,145 7.0
Basic EPS
Earnings
attributable
to ordinary
shareholders
post
exceptional
items (1.3) 109,654,473 (1.2) 1.7 110,528,919 1.5 7.7 109,976,145 7.0
Effect of
dilutive
securities:
Options n/a 6,033,488 n/a n/a 2,801,321 n/a n/a 3,804,698 n/a
Diluted EPS -
pre-exceptional 6.5 115,687,961 5.6 1.7 113,330,240 1.5 7.7 113,780,843 6.8
Diluted EPS (1.3) 115,687,961 (1.2) 1.7 113,330,240 1.5 7.7 113,780,843 6.8
----------------- --------- ------------ --------- --------- ------------ --------- --------- ------------ --------
There were no discontinued operations in the current period. The
discontinued operations loss per share and diluted loss per share
for 31 December 2020 was 1.9p and 30 June 2021 was 2.5p and 2.3p
respectively.
10 Goodwill
Goodwill is allocated to the Group's cash-generating units
(CGUs) identified according to business segment. The goodwill is
attributable to the following business segments:
30 June 2021
31 December 31 December
2021 2020 (audited)
GBPm GBPm GBPm
------------ ------------ -------------
Building 40.0 40.0 40.0
Infrastructure 43.7 37.2 37.2
83.7 77.2 77.2
---------------- ------------ ------------ -------------
As stated in the annual financial statements for the year ended
30 June 2021, detailed impairment reviews were carried out for all
business segments. Consideration has been given as to whether any
events have occurred since the year ended 30 June 2021 which could
give rise to an impairment. No impairments have been identified
from these reviews.
The increase in goodwill relates to an acquisition in the period
(note 17).
11 PPP and other investments
30 June 2021
31 December 2021 31 December 2020 (audited)
GBPm GBPm GBPm
------------------------- -------------------------------------------------- --------------------------------------- ------------
At 1 July 49.1 40.7 40.7
Additions - - 1.9
Disposals of
housebuilding
divisions - - -
Disposals and
subordinated
loan repayments (0.4) (0.2) (1.0)
Movement in fair value (0.4) 3.6 7.5
------------------------- -------------------------------------------------- --------------------------------------- ------------
At 30 June 48.3 44.1 49.1
------------------------- -------------------------------------------------- --------------------------------------- ------------
This portfolio reflects a blended discount rate of 7.0% (31
December 2020: 8.0%; 30 June 2021: 7.0%). A reduction/increase of
1.0% would result in an increase/decrease respectively in the fair
value of approximately GBP4.0m.
12 Trade and other receivables
30 June 2021
31 December 31 December
2021 2020 (audited)
GBPm GBPm GBPm
----------------------------------- ------------ ------------ -------------
Amounts falling due within
one year:
Trade receivables 56.2 53.7 51.8
Less: Provision for impairment
of receivables (0.1) (0.3) (0.1)
----------------------------------- ------------ ------------ -------------
Trade receivables - net 56.1 53.4 51.7
Contract assets 153.5 147.2 159.1
Amounts due from joint venture
undertakings 2.2 2.2 6.1
Prepayments and other receivables 23.3 28.1 26.4
----------------------------------- ------------ ------------ -------------
235.1 230.9 243.3
----------------------------------- ------------ ------------ -------------
As previously disclosed, the Group provided services in respect
of three contracts with entities owned by a major infrastructure
fund of a blue-chip listed company. Costs were significantly
impacted by client-driven scope changes and the Group has submitted
claims to the value of GBP95m in respect of these costs. Our work
on these contracts formally ceased on their termination in August
2018. The Group has taken extensive advice on our entitlement and
we have been successful in two adjudications supporting the
validity of the Group's position. The Group is currently proceeding
through arbitration in respect of the claims and variations in line
with the expected timeframe. Taking into account the requirements
of IFRS 15, in prior periods the Group had constrained the revenue
recognised (and therefore the associated contract receivable
carried) to the extent that it was highly probable not to result in
a significant reversal in the future. While the Group has submitted
a total claim value of GBP95m in respect of these costs within the
Statement of Case, revenue has been constrained. We have
constrained the revenue to a percentage recoverable that is lower
than that successfully recovered from the adjudications and
variations previously agreed on this contract. The underlying
principle supporting the validity and recovery of the claims and
variations is not considered to be impacted by the passage of time,
which is driven by the nature of dispute resolution in this sector.
It is possible that the process of the arbitration will not be
concluded within the coming financial year.
Whilst the entities are owned by a major infrastructure fund of
a blue-chip listed company, and we expect that the amounts will be
repaid, we have assessed any expected credit loss provision in
accordance with IFRS 9 to take into account their investment
structure. At 31 December 2021, our assessment of the credit
worthiness of the underlying contracting entities includes review
of their latest audited financial statements to 31 December 2020
for which the audit opinion includes a disclaimer of opinion in
relation to material uncertainties in respect of claims and the
potential impact on going concern. The expected credit loss
provision for this contract (amongst our overall portfolio of
contracts) is discussed further in the table in note 2, within
critical accounting estimates and judgments.
There has been no change to our assessment of the constrained
revenue under IFRS 15 or the expected credit loss under IFRS 9 in
the period to 31 December 2021. The Group continues to vigorously
defend the counterclaims made by the counterparty, that we consider
are without merit, and as such no amounts have been provided on the
basis the Group considers the possibility of an outflow of
resources to be remote.
13 Trade and other payables
30 June 2021
31 December
31 December 2021 2020 (audited)
GBPm GBPm GBPm
----------------------------- ----------------- ------------ -------------
Trade payables 73.4 105.1 90.9
Contract liabilities 133.4 114.1 99.1
Other taxation and social
security payable 34.7 8.1 30.5
Accruals and other payables 245.7 244.6 264.9
487.2 471.9 485.4
----------------------------- ----------------- ------------ -------------
14 Financial instruments
The Group's activities expose it to a variety of financial
risks. The condensed consolidated half year financial statements do
not include all financial risk management information and
disclosures required in the annual financial statements; they
should be read in conjunction with the Group's financial statements
for the year ended 30 June 2021.
There have been no significant changes in the risk management
policies since the year end.
Fair value estimation
Specific valuation techniques used to value financial
instruments are defined as:
i. Level 1 - Quoted market prices or dealer quotes in active markets for similar instruments.
ii. Level 2 - The fair value of equity securities and interest
rate swaps is calculated as the present value of the estimated
future cash flows based on
observable yield curves.
iii. Level 3 - Other techniques, such as discounted cash flow
analysis, are used to determine fair value for the remaining
financial instruments.
The following table presents the Group's assets that are
measured at fair value:
30 June 2021
31 December 2021 31 December 2020 (audited)
Level Level Total Level
3 Total 3 GBPm 3 Total
GBPm GBPm GBPm GBPm GBPm
Assets
Other investments
* PPP and other investments 48.3 48.3 44.1 44.1 49.1 49.1
Total 48.3 48.3 44.1 44.1 49.1 49.1
--------------------------------------- ----------------- ------ --------- -------- ------- ------
There were no transfers between levels during the period. The
valuation techniques used to derive Level 2 and 3 fair values are
consistent with those set out in the 30 June 2021 financial
statements. Level 3 fair values are determined using valuation
techniques that include inputs not based on observable market data.
For all other financial instruments, the fair value is materially
in line with the carrying value.
The key assumptions used in Level 3 valuations include the
expected timing of receipts, credit risk and discount rates. The
typical repayment period is 10-15 years and the timing of receipts
is based on historical data. The fair value of the portfolio
reflects a blended discount rate of 7.0% (31 December 2020: 8.0%;
30 June 2021: 7.0%) and is based on current market conditions. The
sensitivity to discount rates is set out in note 11. If receipts
were to occur earlier than expected, the fair value could
increase.
15 Guarantees and contingent liabilities
Galliford Try Holdings plc has entered into financial guarantees
and counter indemnities in respect of bank and performance bonds
issued in the normal course of business on behalf of Group
undertakings, including joint arrangements, amounting to GBP131.9m
(31 December 2020: GBP141.0m; 30 June 2021 GBP146.8m).
Disputes arise in the normal course of business, some of which
lead to litigation or arbitration procedures. The directors make
proper provision in the financial statements when they believe a
liability exists. While the outcome of disputes and arbitration is
never certain, the directors believe that the resolution of all
existing actions will not have a material adverse effect on the
Group's financial position.
16 Related party transactions
Since the last Group annual financial statements for the year
ended 30 June 2021, there have been no significant changes to the
nature of related party transactions.
17 Business combinations
On 7 October 2021, the Group acquired the water business of nmcn
plc (which had been placed into administration) for GBP1.0m. This
expanded the Group's geographical presence on key frameworks across
the UK, and increased its capabilities in the water sector, in line
with the Group's strategy.
The acquisition comprised of significantly all of the water
business contracts and orderbook of nmcn plc and the entire share
capital and control of Lintott Environmental Technologies Limited
and its trading subsidiary Lintott Control Systems Limited
("Lintott"). The acquired business delivers water and wastewater
projects for clients across the UK and, in combination with
Lintott, enhances the design and MEICA capabilities of our
Environment business which will further allow growth across these
areas.
The goodwill arising from the acquisition is significantly
attributable to the acquired workforce, consisting of around 900
employees, and is expected to be deductible for tax purposes in
future periods.
The following table summarises the consideration paid and the
provisional fair value (due to the proximity of the acquisition to
the reporting period) of the assets acquired and liabilities
assumed.
GBPm
-------------------------------------------------------- -------
Recognised amounts of identifiable assets acquired and
liabilities assumed
Net cash and cash equivalents 0.7
Property plant and equipment 0.1
Intangible assets(1) 5.8
Right-of-use assets 1.4
Trade and other receivables(2) 10.4
Trade and other payables(3) (22.2)
Lease liabilities (1.4)
Net deferred tax liabilities(4) (0.3)
-------------------------------------------------------- -------
Total identifiable net liabilities (5.5)
Goodwill 6.5
-------------------------------------------------------- -------
Total 1.0
-------------------------------------------------------- -------
Consideration
Cash 1.0
Total 1.0
-------------------------------------------------------- -------
1 Intangible assets of GBP5.8m comprise customer relationships,
brand and technology that will be amortised over 3 -10 years.
2 Trade and other receivables include GBP8.1m of contract
assets. The fair value of the trade receivables is considered to be
equivalent to the book value acquired.
3 Trade and other payables include GBP19.1m of contract liabilities.
4 Deferred tax has been recognised where temporary differences
arise on the fair value adjustments.
The acquisition contributed GBP12.7m of revenue and GBP0.6m of
pre-exceptional profit before tax in the period to 31 December
2021. The performance of the business preceding the acquisition was
impacted by nmcn plc entering administration, and accordingly it is
impracticable to assess the contribution it would have made to the
Group if acquired at the start of reporting period.
Acquisition related costs of GBP6.3m include legal and
professional fees, integration and restructuring, and specific
staff costs, have been treated as exceptional, being material and
non-recurring/irregular items in accordance with our accounting
policies (note 5).
18 Alternative performance measures
Throughout the Interim statement, the Group has presented
financial performance measures which are used to manage the Group's
performance. These financial performance measures are chosen to
provide a balanced view of the Group's operations and are
considered useful to investors as they provide relevant information
on the Group's performance. They are also aligned to measures used
internally to assess business performance in the Group's budgeting
process and when determining compensation. An explanation of the
Group's financial performance measures and appropriate
reconciliations to its statutory measures are provided below.
Measuring the Group's performance
The following measures are referred to in this report:
Statutory measures
Statutory measures are derived from the Group's reported
financial statements, which are prepared in accordance with
International Accounting Standards adopted for use in the UK and as
issued by the International Accounting Standards Board (IASB) and
in line with the Group's accounting policies. The Group's statutory
measures take into account all of the factors, including
exceptional items which do not reflect the ongoing underlying
performance of the Group.
Alternative performance measures
In assessing its performance, the Group has adopted certain
non-statutory measures that more appropriately reflect the
underlying performance of the Group. These typically cannot be
directly extracted from its financial statements but are reconciled
to statutory measures below:
a) Pre-exceptional performance
The Group adjusts for certain material items which the Board
believes assist in understanding the performance achieved by the
Group as this better reflects the underlying and ongoing
performance of the business.
b) Pre-exceptional operating profit/(loss) before amortisation
and operating margin
The Group uses an operating profit measure excluding
amortisation and exceptional items.
Operating margin reflects the ratio of pre-exceptional operating
profit before amortisation and pre-exceptional revenue. This
differs from the statutory measure of profit before finance costs
which includes the share of joint ventures' interest and tax and
amortisation of intangible assets. Divisional operating margin
represents the combined Building and Infrastructure operating
margins.
A reconciliation of the statutory measure to the Group's
performance measure is shown below, based on continuing
operations:
Building Infrastructure PPP Investments Central Total
GBPm GBPm GBPm GBPm GBPm
-------- --------------
Half year ended 31 December 2021
Statutory operating profit/(loss) 7.9 (2.2) (0.5) (9.2) (4.0)
add: amortisation of intangible
assets 0.5 0.2 - 0.5 1.2
exclude: exceptional items (note
5) - 6.3 - 3.4 9.7
Pre-exceptional operating profit/(loss)
before amortisation 8.4 4.3 (0.5) (5.3) 6.9
---------------------------------------- -------- -------------- --------------- ------- -------
Revenue 386.2 204.4 3.4 - 594.0
---------------------------------------- -------- -------------- --------------- ------- -------
Operating margin 2.2% 2.1% n/a n/a 1.2%
---------------------------------------- -------- -------------- --------------- ------- -------
Half year ended 31 December 2020
Statutory operating profit/(loss) 5.5 2.4 (0.7) (4.3) 2.9
add: amortisation of intangible
assets 0.5 - - 0.5 1.0
Operating profit/(loss) before
amortisation 6.0 2.4 (0.7) (3.8) 3.9
---------------------------------------- -------- -------------- --------------- ------- -------
Revenue 374.5 164.1 3.1 - 541.7
---------------------------------------- -------- -------------- --------------- ------- -------
Operating margin 1.6% 1.5% n/a n/a 0.7%
---------------------------------------- -------- -------------- --------------- ------- -------
Year ended 30 June 2021 (audited)
Statutory operating profit/(loss) 14.9 6.0 (1.8) (11.1) 8.0
add: amortisation of intangible
assets 1.0 - - 1.1 2.1
Operating profit/(loss) before
amortisation 15.9 6.0 (1.8) (10.0) 10.1
---------------------------------------- -------- -------------- --------------- ------- -------
Revenue 789.2 329.2 6.4 - 1,124.8
---------------------------------------- -------- -------------- --------------- ------- -------
Operating margin 2.0% 1.8% n/a n/a 0.9%
---------------------------------------- -------- -------------- --------------- ------- -------
c) Pre-exceptional profit before tax
The Group uses a profit before tax measure which excludes
exceptional items as noted above, whereas the statutory measure
includes exceptional items.
A reconciliation of the statutory measure to the Group's
performance measure is shown below, based on continuing
operations:
Half year to Half year to
31 December 31 December Year to 30 June
2021 2020 2021 (audited)
GBPm GBPm GBPm
-------------------------------- ------------ ------------ -----------------
Statutory (loss)/profit before
tax (2.6) 4.1 11.4
add: exceptional items (note 5) 9.7 - -
-------------------------------- ------------ ------------ -----------------
Pre-exceptional profit before
tax 7.1 4.1 11.4
-------------------------------- ------------ ------------ -----------------
d) Pre-exceptional earnings per share
In line with the Group's measurement of pre-exceptional
performance, the Group also presents its earnings per share on a
pre-exceptional basis. This differs from the statutory measure of
earnings per share which includes exceptional items.
A reconciliation of the statutory measure to the Group's
performance measure is shown below, based on continuing
operations:
Half year to 31 December
2021
------------------------- ---- -----------------------------
Earnings Ave number EPS
GBPm of shares pence
------------------------- -------- ----------- ------
Statutory results (1.3) 109,654,473 (1.2)
Exclude: e xceptional
loss (note 5) 7.8 n/a n/a
------------------------- -------- ----------- ------
Pre-exceptional earnings
per share 6.5 109,654,473 5.9
------------------------------- -------- ----------- ------
Half year to 31 December
2020
------------------------- ---- -----------------------------
Earnings Ave number EPS
GBPm of shares pence
------------------------- -------- ----------- ------
Statutory results 3.8 110,528,919 3.4
Exclude: e xceptional
earnings (note 5) - n/a -
------------------------- -------- ----------- ------
Pre-exceptional earnings
per share 3.8 110,528,919 3.4
------------------------------- -------- ----------- ------
Year ended 30 June 2021
(audited)
------------------------- ---- -----------------------------
Earnings Ave number EPS
GBPm of shares pence
------------------------- -------- ----------- ------
Statutory results 10.4 109,976,145 9.5
Exclude: e xceptional
earnings (note 5) - n/a n/a
------------------------- -------- ----------- ------
Pre-exceptional earnings
per share 10.4 109,976,145 9.5
------------------------------- -------- ----------- ------
19 Discountinued operations
On 3 January 2020, the Group completed the disposal of the
Linden Homes and Partnerships & Regeneration divisions of
Galliford Try Limited (formerly Galliford Try plc) following the
implementation of a Group restructuring and scheme of arrangement
under Part 26 of the Companies Act 2006 becoming effective on 2
January 2020. In addition, certain other assets and liabilities
transferred to Vistry plc as part of this transaction. With effect
from 8:00 a.m. on 3 January 2020, 111,053,489 Galliford Try
Holdings plc shares with a nominal value of 50p each, being the
entire issued share capital of Galliford Try Holdings plc, was
admitted to the premium listing segment of the Official List of the
FCA and to trading on the main market for listed securities of the
London Stock Exchange with a corresponding cancellation of all
shares of Galliford Try plc.
The Group has not treated any items as discontinued during the
current period. The loss for comparative periods of these
discontinued operations are as follows:
Half year to 31 December 2020
Central Total
Loss for the period from discontinued operations GBPm GBPm
--------------------------------------------------- -------- --------
Revenue - -
Operating loss and loss before taxation (2.6) (2.6)
Income tax credit 0.5 0.5
--------------------------------------------------- -------- --------
Loss for the period (2.1) (2.1)
--------------------------------------------------- -------- --------
Year ended 30 June 2021 (audited)
Central Total
Loss for the period from discontinued operations GBPm GBPm
--------------------------------------------------- -------- --------
Revenue - -
Operating loss and loss before taxation (2.7) (2.7)
Income tax expense - -
--------------------------------------------------- -------- --------
Loss for the period (2.7) (2.7)
--------------------------------------------------- -------- --------
These costs were primarily residual professional fees and other
costs relating to the transaction and discontinued operations. The
Group is not expecting to incur any further costs in respect of
discontinued operations.
Principal risks and uncertainties
The directors consider that the principal risks and
uncertainties which may have a material impact on the Group's
performance in the second half of the financial year remain
primarily the same as those outlined on pages 36 to 40 of the
Group's annual report and financial statements for the year ended
30 June 2021. Those risks the Group considers to be of particular
importance and highlighted as the principal risks in focus within
the 30 June 2021 annual report are; work winning, project delivery,
resources and compliance and cyber security. The impact of Covid-19
has also been re-assessed during the period and up to the date of
approval of this interim report and note no significant impact to
those risks disclosed in the Group's annual report for the year
ended 30 June 2021. Further details are included in our assessment
of the going concern assumption within note 1. Details of these
risks along with any updates will be included in the Group's 2022
Annual Report and Accounts.
Forward looking statements
Certain statements in this half year report are forward looking.
Such statements should be treated with caution as they are based on
current information and expectations and are subject to a number of
risks and uncertainties that could cause actual events of outcomes
to differ materially from expectations.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the
Group were prepared in accordance with international accounting
standards in conformity with the requirements of the Companies Act
2006 and international financial reporting standards adopted
pursuant to regulation (EC) No. 1606/2002 as it applies in the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, 'Interim
Financial Reporting'.
On 31 December 2020, IFRS as adopted by the European Union at
that date was brought into UK law and became UK-adopted
international accounting standards, with future changes being
subject to endorsement by the UK Endorsement Board. The Group
transitioned to UK-adopted international accounting standards in
its consolidated financial statements on 1 July 2021. There was no
impact or changes in accounting policies from the transition.
The directors confirm that these condensed consolidated half
year financial statements have been prepared in accordance with IAS
34 as adopted by the UK; and that the interim management report
herein gives a true and fair view of the assets, liabilities,
financial position and profit of the Group as required by DTR 4.2.4
and includes a fair review of the information required by DTR 4.2.7
and DTR 4.2.8 namely:
-- an indication of important events that have occurred during
the six months and their impact on the condensed set of financial
statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year;
and
-- material related party transactions in the first six months
and any material changes in the related party transactions
described in the last annual report.
The directors of Galliford Try Holdings plc are:
Peter Ventress Non-executive Chairman
Bill Hocking Chief Executive
Andrew Duxbury Finance Director
Terry Miller Senior Independent Director
Gavin Slark Non-executive Director
Marisa Cassoni Non-executive Director
Signed on behalf of the Board.
Bill Hocking
Chief Executive
Andrew Duxbury
Finance Director
3 March 2022
Independent review report to Galliford Try Holdings plc
Report on the condensed consolidated interim financial
statements
Conclusion
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 31 December 2021 which comprises the condensed
consolidated income statement, the condensed consolidated statement
of comprehensive income, the condensed consolidated balance sheet,
the condensed consolidated statement of changes in equity and the
condensed consolidated statement of cash flows.
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 31
December 2021 is not prepared, in all material respects, in
accordance with UK adopted International Accounting Standard 34 and
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410, "Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity" ("ISRE (UK) 2410"). A review of interim financial
information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially
less in scope than an audit conducted in accordance with
International Standards on Auditing (UK) and consequently does not
enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with UK adopted international
accounting standards. The condensed set of financial statements
included in this half-yearly financial report has been prepared in
accordance with UK adopted International Accounting Standard 34,
"Interim Financial Reporting.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis for
conclusion section of this report, nothing has come to our
attention to suggest that the directors have inappropriately
adopted the going concern basis of accounting or that the directors
have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in
accordance with ISRE (UK) 2410, however future events or conditions
may cause the group to cease to continue as a going concern.
Responsibilities of directors
The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct
Authority.
In preparing the half-yearly financial report, the directors are
responsible for assessing the company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the review of the financial
information
In reviewing the half-yearly report, we are responsible for
expressing to the Company a conclusion on the condensed set of
financial statement in the half-yearly financial report. Our
conclusion, including our Conclusions Relating to Going Concern,
are based on procedures that are less extensive than audit
procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
Our report has been prepared in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority and for no other purpose. No person is
entitled to rely on this report unless such a person is a person
entitled to rely upon this report by virtue of and for the purpose
of our terms of engagement or has been expressly authorised to do
so by our prior written consent. Save as above, we do not accept
responsibility for this report to any other person or for any other
purpose and we hereby expressly disclaim any and all such
liability.
BDO LLP
Chartered Accountants
London, UK
Date 3 March 2022
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
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